Majority believe that house prices will increase in 2010

South coast property developers unable to get finance

UK house prices rise by +1%

Largest ever regeneration in Salford’s history

Small firms believe that the current tax system is unfair

According to Rightmove, in January 2009 only 10% of survey respondents believed house prices would increase in the next 12 months, however that same survey conducted in January 2010 has discovered that 53% of all respondents believe that house prices will increase this year, providing a very encouraging indication from a consumer viewpoint of how prices might perform.

Miles Shipside, Rightmove’s commercial director, said: “Given the looming election and the talk of pending austerity packages ahead, this consumer survey highlights a surprisingly positive property price outlook.”

Rightmove stated that as the UK is on the verge of exiting the recession , the current conditions of house price stability have provided a sufficient level of confidence for more home-hunters to re-enter the market. This is backed up by Rightmove’s website which recorded record levels of traffic in the first few weeks of 2010. This coincided with the average UK asking price increasing by +1.2% in the first week of January 2010.

Shipside said: “The property market is in a virtuous circle scenario, where consumers are seeing less property up for sale and fresh to the market property selling more quickly. That rightly gives them the impression that we are over the worst of the recent price falls, and that there is likely to be upward pressure on prices.”

South coast property developers unable to get finance

Property developers looking to gain finance for developments on the south coast are having trouble according to solicitors Adams & Remers, as banks are unwilling to lend on the projects.

Despite an increasingly buoyant local property market, the company has evidence from two large institutional lenders, who indicated that they were both under instructions to turn down any requests for funding to develop or build property in the area.

David Platt, a partner and head of Adams & Remers commercial property team, said: “There are developers across the South East sitting on land banks that they wish to develop and bring to the market, particularly now as the housing market is beginning to show signs of recovery. However the banks continue to show no appetite to fund such development. Developers can unfortunately expect to continue to see a near complete lack of funding for quite some time yet.”

However, according to Adams & Remers, there are a number of niche areas where developers are finding it relatively easier to access funds, these being healthcare-related projects which are for the Government or primary care trusts as they have full or part-funding in place.

Platt said: “Developers are also seeing profitable work in developing affordable housing schemes, including accommodation for key workers and students. Developers will buy land and develop, with a registered social landlord, university or employer funding the project via staged payments. The only downside is that any profit the developer makes is held back until the project is completed.”

Adams & Remers also pointed out that if a company wished to obtain finance for the acquisition of new-build premises for the company’s own use it would most likely be able to do so. Problems are only arising if the property developer itself is seeking bank finance for the development.

UK house prices rise by +1%

House prices rose by +1% in January 2010 according to Hometrack’s latest national house price survey , with a year-on-year rate of -0.8%.

There was also a decline in both the number of new sales and buyer registrations, with the average time to sell increasing for the first time since January 2009 as it grew to 8.6 weeks, up from 8.3 weeks in December 2009.

Richard Donnell, Hometrack’s director of research, said, “Despite national trends pointing to lower numbers of sales agreed, the small monthly increase was as a result of prices rising in just 7% of postcodes - these largely confined to southern England. It is worth noting that the average price of property in rising markets is 35% higher than that of the national average (£212,000 compared to £157,000). This highlights how pockets of the market, where scarcity of supply and equity fuelled demand, are creating upward pressure on prices.”

However, the volume of available housing for sale continued to decline, which had been a key factor in the price rises, albeit in just these three regions Greater London, the South East and the South West.

Donnell said: “While the latest house price survey shows weaker demand (-2.7% down from 2.2% in December), new buyer registrations and an increase in the supply of homes for sale are likely to post a seasonal upturn next month. The scale of this increase compared to previous years will be an important indicator of what sort of market conditions we can expect in the run up to the election. The market built up something of a head of steam over 2009 in some but not all areas, boosting sentiment. Weaker demand and the fact we are starting from a higher base than a year ago means the outlook for 2010 remains far from certain.”

Largest ever regeneration in Salford’s history

Salford city council has approved a planning application which will be the largest ever in the city of Salford’s history.

The plan will assist in the regeneration of the area and link key sites such as the University of Salford and The Crescent, Chapel Street and the region’s business district - Spinningfields, covers an area of 17.744ha - equivalent to 21 international football pitches and was submitted by English Cities Fund (ECf) with the support of Central Salford Urban Regeneration Company.

Sir Michael Lyons, non-executive chairman of the English Cities Fund, said: “I am delighted that Salford City Council has today resolved to grant planning permission for this English Cities Fund development. The decision is a significant landmark and lays the foundations for the much needed regeneration of this area. There remains a considerable amount of work to do before development commences however, with the continued support of its partners and the local community, I am confident that ECf will produce a development that Salford can be proud of.”

The proposed development is looking to create sustainable communities with the correct balance of uses and will include new offices, commercial, retail and leisure uses but will be complemented by family housing and apartments linked by high-quality public realm and civic spaces.

Chris Farrow, Central Salford Urban Regeneration Company chief executive, said: “Today’s decision marks a critical milestone in the regeneration of this key area of the City. Over the last two years Central Salford Urban Regeneration Company, in close partnership with our public and private sector partners, local businesses and communities, has worked tirelessly on the planning, design and consultation for the Chapel Street area.”

A new square, St Johns Place, is planned to maximise the view of the newly renovated Salford Cathedral. A new Commercial Quarter will make the most of Salford’s strategic location next to Spinningfields and the corporate heart of Manchester.

Small firms believe that the current tax system is unfair

Research by the Forum of Private Business (FPB) showed that many small firms believe that the current tax system favours big businesses and is need of urgent simplification.

The poll carried out by FPB found that more than two thirds of SME owners believe the tax burden placed on them is unfair, with 20% stating that the system is overly complex and needs to be made simpler, and 13% stated they want to see the tax system reformed to make Britain more competitive internationally.

Phil McCabe, FPB’s spokesman, said: “Our members believe that they are bearing an unfair tax burden because of the moderate sizes of their businesses. 

“The complexity of the British tax system is not only time-consuming and frustrating, it also puts small firms at an instant disadvantage. Big companies have the expertise and resources to understand the system and minimise their tax burden. For most of our members, hiring an outside tax consultant represents a significant cost few can afford, especially in the midst of a recession.” 

In response to the Pre-Budget Report (PRB), over 50% of those polled felt that it undermined both business confidence and future employment, with many also distinctly underwhelmed by the measures announced by the Chancellor.

McCabe said: “Whichever party comes to power at the general election, we would like to see them lay the foundations of a bold new tax environment where small firms are rewarded, rather than unfairly penalised, for the huge contribution they make to the British economy.”

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